FIGURAL FINALE: Those figures on the shelf built the brand, but Precious Moments executives are trying to harness that value in broader product lines.
Photo provided by AUBREY OLSON
Business Spotlight: Test of Time
Precious Moments Co. Inc. has built an iconic American brand, recorded over $12 billion in retail sales of its classic figurines and grown into international markets – all from its roots in the southwest Missouri town of Carthage.
Now on the precipice of its 40th anniversary, officials of the privately held company are asking where the company goes from here.
Answering that question is a key function for Steve Kosmalski. He was brought on as CEO two years ago to reenergize sales.
“The Precious Moments brand sales have been flat,” Kosmalski says. “We were in a class of trade that was declining – that was the primary reason.”
Precious Moments peaked in the 1980s-1990s, largely with motherly audiences appealing to their inspirational and spiritual sides but also in the collectible market. It’s a critical juncture with the shrinkage of gift stores, such as Hallmark where the figurines had strong penetration, and changing purchasing habits of consumers.
Early solutions by Kosmalski and his team are in licensing the brand in a broader product mix, tapping deeper into international markets and entering new media – think entertainment channels, akin to Care Bears.
“We needed to contemporize our designs in terms of their clothing and hair in order to appeal to fresh audiences, ” Kosmalski acknowledges.
Today, the figurines of boys and girls riding teeter-totters or talking on rotary-dial phones are getting shelved for a child dancing with one-eyed Mike Wazowski or reading with Sulley from “Monsters, Inc.” Yes, Disney’s now in the picture – along with branded backpacks and plush toys. This is the new Precious Moments.
However, one design remains: the children’s teardrop eyes created by artist and founder Sam Butcher. And the family still holds the controlling interest: Don Butcher in Carthage, Deb Butcher in Utah and Jon Butcher in Chicago.
It was Sam Butcher’s children who tapped Kosmalski.
Time for turnaround
Kosmalski has worked in turnaround situations before.
He’s a retail product guy with 40 years under his belt, spanning jobs for Johnson & Johnson, Revlon and International Paper. His track record shows the last several assignments were to bolster product sales in emerging markets.
“Sometimes you can’t. This one I felt very confident,” Kosmalski says.
While all of Sam’s children are artistically oriented like him, Kosmalski says Deb is the one with a daily role, working on the creative side. Directly reporting to the family, he sought a clear direction early on.
“I asked them, ‘What do you want to do with this business?’ There were several directions this business could go,” he says. “They want to continue the legacy and message of the brand, which is loving, caring and sharing.”
Next up was his timeline.
“My time period to stabilize the brand was two years,” he says. “It normally takes around that time, to understand it and to get the right people and strategy in place.”
Kosmalski went to work, leaning on experiences taking Crescent photo matting into Michaels and Hobby Lobby stores and Stein World furniture onto e-commerce, such as Wayfair.com.
His process with Precious Moments involved surveys, extensive market research and advisory board discussions. It led him and his team to tap into licensing the brand.
“The brand has been around for 40 years and has a high loyalty,” he says, citing the 93 percent brand recognition, one of the results by survey firm Field Agent. “It has survived the test of time.”
Now, he says the biggest part of the business is retail sales of manufactured products and royalties from licensees. Precious Moments works with over 30 licensees, from large sellers in California to Singapore.
Plush toy manufacturer Aurora World signed a license agreement 18 months ago and brought its first Precious Moments products to market in June. Director of Product Development Dee Dee Valencia says Aurora has the exclusive rights to design, manufacture and market Precious Moments-branded plush toys.
“We do a comprehensive plush line as well as a Precious Moments baby line and soft dolls,” she says, noting popular characters are Luffie Lamb and Charlie Bear.
The market is global, she says.
“You’ll see it in brick and mortar, mom and pops and national accounts – pretty much every retailer,” she says, citing Hallmark, Buy Buy Baby and Amazon.
The Precious Moments brand is appearing on clothing, blankets, picture frames and activity books.
In the last year, Kosmalski says Precious Moments expanded direct selling to major retailers and department stores, such as Walgreens, Macy’s and Belks, as well as Kroger supermarkets. Direct sales, including through the catalog and its own website, now account for 30 percent of the business and climbing, he says, declining to disclose the financials. He’s also taken a stab at e-commerce and social media changes.
“When I got here, our e-commerce business was in need of a major boost in terms of best practices,” says Kosmalski.
In January, he brought in Jim Kowalczyk as director of e-commerce and direct marketing in the Chicago office.
“We’ve been extremely busy optimizing our products on the likes of Pinterest and Facebook,” Kosmalski says.
At last count, Precious Moments had 131,683 likes on Facebook and 2,529 Twitter followers. It’s also connecting with mom bloggers on children’s products and decor.
“Today’s consumers are really trusting each other, more than what the companies tell them,” he says.
Now, on the back part of the strategy for the next three years, the Precious Moments team is high on selling licensing rights for media and animation.
“Don’t be surprised if you see some Precious Moments TV shorts, Netflix or otherwise a short time down the road. We’re dealing with one of the top three agents right now in the entertainment business,” he says, noting the nondisclosure agreement could lift upon signatures in the next 30 days.
But what about those figurines on grandma’s shelf? “The figural product will always be there,” Kosmalski says, “but not nearly to the degree it was in the past.”
“I think that is probably one of the most important things you could do, is to keep up with the trends, but not get muddled in them and not get so sucked in that that is the only thing you do,” …
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